Economy

What makes September 15, 2008, important for the history of American foreign policy is not simply the financial crisis that the Lehman collapse crystallized, or the recession that it dramatically worsened, but rather the impact of these developments in combination with the principal economic challenges that the United States will have to confront in the twenty-first century, in particular the benefits promised to older Americans, the ranks of which will swell in the years ahead. Together they will vastly expand the economic obligations of the American federal government, which will in turn narrow the scope of foreign policy by diminishing the resources available for it.

The infrastructure investments are part of a package of targeted proposals the White House announced on Monday. With November's elections for control of Congress approaching, Obama planned to discuss the proposal later Monday at a Labor Day event in Milwaukee.

The proposals would require congressional approval, which is highly uncertain at a time when many legislators and voters are worried about adding to federal deficits that are already sky-high.

As the economy again sputters and potential buyers flee — July housing sales sank 26 percent from July 2009 — there is a growing sense of exhaustion with government intervention. Some economists and analysts are now urging a dose of shock therapy that would greatly shift the benefits to future homeowners: Let the housing market crash.

The E.C.B. has been lending euro-zone banks as much as they want at 1 percent interest, provided the banks can put up collateral like government bonds. The massive liquidity has helped weaker banks survive periods when they were unable to borrow from other banks or outside investors.

The fact that higher-risk European debt was less liquid, or harder to sell quickly, “was less of a concern for euro-area banks than for other banks since the former could ‘liquefy’ this debt in their operations with the E.C.B.,” the B.I.S. said.

The economic and financial crisis that began in 2007 is far, far from over. The cyclical recovery spurred by government intervention is fading and future efforts to “save” firms and industries that are beyond salvation will only delay the inevitable. The same applies to macro-economic concepts and policies and political structures based on them, which have proven to be unviable – such as the free flow of capital and labor, one of the central dogma of neo-liberal economics, or the provision of generous pensions to public-sector employees.

While cheap labor has been a key factor in generating high growth over the past three decades, it has also contributed to profound income disparities, especially in recent years. And persistent, widening inequality might cause social crises that could interrupt growth and damage competitiveness. China must avoid such a scenario, and if wages could increase in some meaningful way, it would indicate that the economy might finally reach the next stage of development, during which income disparities would be narrowed.

Mr Barnier was speaking after the agreement in principle last Friday by European parliamentarians and diplomats to an overhaul of the way banks and markets in the region are supervised. The framework is likely to be endorsed by European Union finance ministers on Tuesday.

Environment

"We come out and catch all our Mississippi oysters right here," James "Catfish" Miller, a commercial shrimper in Mississippi, said in an interview. Pointing to the area in the Mississippi Sound from his shrimp boat, he added, "It's the only place in Mississippi to catch oysters, and there is oil and dispersants all over the top of it."

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

Funny how quite a lot of interesting (and pertinent) stuff is coming from Russia Today,

The Russians get it. Things are pretty straightforward over there. Mess with the leaders: You get hit. At all levels, if you support Russia and its citizens, you are fine. If you are out looking for yourself, expect rough treatment, such as Khodorovsky, the former head of Yukos.

Russia also understands that oil and gas the key to power, and at this time they hold immense power. They are not wrapped up in the conspiracy to hold up oil prices called OPEC, Cap and Trade, and Peak Oil.

Folks we are at least 1000 years from any notion of peak oil or subistitute like tar sands, heavy oil, shale oil, or coal derived oil. Not the least of which is Russia's deep drilling which has exposed deposits of abiotic gas and oil. The west is being manipulated around fear, and Russia is laughing at the US and Europe. Russia is slowly enveloping Germany into dependence and will have its will over Europe. They are about raw, unadulterated power.

The west is about playing parlor games with people's lives using play money.

Folks we are at least 1000 years from any notion of peak oil or subistitute like tar sands, heavy oil, shale oil, or coal derived oil. Not the least of which is Russia's deep drilling which has exposed deposits of abiotic gas and oil.

I'm not a big believer in abiotic oil - even as difficult as it is for me to fathom all the dinos and ferns that had to die to make oil. I've seen science proved wrong before - so I'm not going to throw down any gauntlets here.

But one thing I do believe gives Peak Oi credence is this: Demand is outpacing production. If not for this economic disaster we'd be in deep dog do right now. I think we will find the tar sands to be very expensive and I think water will impose some serious constraints on that yield. My way of rationalizing Peak Oil (which I myself lean towards) versus Abiotic is this: I don't care, all I care is that every field is in decline and the population is growing and demanding more oil. If it is in fact Abiotic then Mother Earth isn't nursing fast enough.